Everything You Need to Know About Marketing Attribution in 2023

With tightened budgets, rapidly evolving market dynamics,  and increasing competition, there is more pressure on marketing teams to perform and show their contribution to revenue generation. This makes it vital to determine which digital campaigns contribute the most to sales and revenue, have the greatest influence on your brand, and deliver a superior return on investment (ROI).

Digital marketing platforms produce lots of data which can be used to calculate the effectiveness of a marketing program and its various channels. The challenge is choosing what data to use, then analyzing it in a meaningful, accurate way. This is where marketing attribution is beneficial. By attributing a sale (conversion) to multiple marketing channels and touchpoints, you can learn what marketing strategies and the elements within them work best. You’ll also learn what didn’t work to help adjust future marketing efforts.

Multi-touch attribution is a valuable tool for marketers, but it’s a broad topic requiring more than a short explanation. We’ve created this marketing attribution guide to help you learn more about what it is, why it matters, and how you can apply it.

What is marketing attribution?

Marketing attribution is the identification of touchpoints customers interact with before making a purchase. For example, if a customer views a Google ad, clicks through to your website, then watches a video on the website before making a purchase, the Google ad and the video can both be attributed to the conversion event. If you were also running ads on Instagram targeted to the same audience that weren’t part of the customer journey, then they aren’t attributable. In this example, through marketing attribution, you learned that ad spend on social media didn’t contribute positively to ROI.

What are the benefits of marketing attribution?

Fundamentally, marketing attribution is about marketing’s accountability for revenue generation and ROI, marketing budget justification, and budget allocation. It provides insights into the effectiveness of marketing campaigns and channels, and highlights advertising KPIs (key performance indicators), so you can determine where to allocate your marketing budget and deliver the best ROI. Marketing attribution also helps marketing organizations prove their contribution to a company’s earned revenue, which helps justify the overall marketing budget within an organization.

Types of marketing attribution

When using multiple channels, the marketing attribution model you choose and how you apply weight factors to different touchpoints is important. It’s the foundation for accurate attribution.

Single-touch attribution models

Single-touch attribution models assign a conversion to a single touchpoint, typically the first or the last.

• First-touch attribution - credits 100% of a sale to the first marketing touchpoint, such as a social media ad that produces a click through that leads to an online purchase. The trouble with first-touch attribution is that other touchpoints which influenced the sale are not counted.
• Last-touch attribution - applies the conversion credit entirely to the final touchpoint, such as a marketing employee who acts on a request for more information from a website form. Although last-touch attribution is the easiest to measure, it doesn’t credit other touchpoints that influenced the customer’s decision to buy. For example, if a digital ad generated a click-through to a website where the customer filled out an information form used by a marketing representative to call and close the sale, nothing that contributed before the call to close the sale is counted.
  

Multi-touch attribution models

Multi-touch attribution models involve assigning conversion credit to multiple touchpoints the customer interacted with along the buyer journey.  A variety of marketing channels usually nurture and influence customers toward a sale versus just one. This means simple single-touch marketing attribution models misrepresent touchpoint contribution to ROI.  Multi-touch attribution can be a more accurate and valuable tool, but it requires more planning and complex data analysis. Start by identifying the multi-touch attribution model that is the best fit for your goals.

• Linear MTA -  applies equal weight and revenue credit to all touchpoints on the customer journey. This may not accurately reflect the intrinsic value of each touchpoint. A pop-up, for example, may not have influenced the conversion event as much as a video demonstrating the product on the website.
• Time decay MTA - can be applied if you have a lengthy sales cycle with multiple touchpoints spread out during the cycle. The model gives credit to more recent touchpoints. It assumes earlier touchpoints didn’t have the same impact on the conversion, and may not accurately reflect credit to touchpoints at the top of the sales funnel.
• U-shaped MTA - equally credits to two touchpoints, first-touch and lead generation, allocating 40% weight to each. Any touchpoints in between get the remaining 20% divided among them. This model helps highlight the value of lead generation, but omits touchpoints that follow which could be attributed to conversion.
• W-shaped MTA  - is similar to the U-shaped model, but includes a third touchpoint, opportunity creation. Opportunity creation is a set of activities that, for example, help a customer prefer your product of service over a competitor’s. The three touchpoints each receive 30% of the credit, while the remaining middle touches share 10%. Last-touch is missing from this model. For example, if a customer has an item in the cart and tries to exit the website without completing a purchase, a pop-up offering an extra year of free extended warranty which influenced the conversion won’t be credited as a touchpoint.
• Full path MTA - builds on W-shaped multi-touch attribution by including the final close. Measuring the entire funnel, 22.5% of the revenue credit is allocated to first-touch, lead generation, opportunity creation, and final close. The remaining 10% is distributed across attributable touchpoints between each of these.
• Custom MTA - If you believe multi-channel attribution models won’t provide the data you need for correct conversion attribution and weighting, consider developing your own customized attribution model. As you step through multi-channel attribution, each model becomes more complex than the other. While a custom model can provide the most accurate evaluation of touchpoint impact on a customer’s journey, it can be difficult and time-consuming to develop.

How to measure marketing attribution?

By now you are likely wondering how all of the data that goes into an attribution model is gathered and measured. Below we’ve outlined the main ways advanced, multi-touch attribution solutions can track marketing activities across channels, platforms, and mediums.

‍Conclusion/Next Steps

Implementing marketing attribution is common sense in today’s competitive market landscape. It is key to determining which digital marketing campaigns and the individual elements within them perform well, and those that don’t. Ultimately, marketing attribution helps you get more out of your marketing budget and prove ROI. But as we’ve seen, the complexity of marketing attribution models makes them challenging to select, apply, and accurately measure. Gleaning insightful, meaningful data via these models takes time and skills, but the payoff can be substantial.

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